6 October 2014: The income gap between the best-off and worst-off regions has widened in 17 of the 34 Organization for Economic Co-operation and Development (OECD) countries since the 2008 financial crisis, according to the OECD Regional Outlook 2014. Titled ‘Regions and Cities: Where Policies and People Meet,’ the report also describes inequality in other determinants of well-being, such as air quality, health and safety, and underscores the need for broader measures of well-being.

OECD launched the 2014 Outlook, along with another regional report, ‘How’s Life in Your Region,’ at the 12th European Week of Regions and Cities, in Brussels, Belgium. OECD Secretary-General Angel Gurría said, “The regional convergence engine has stalled since the crisis. National standards of well-being are not felt equally by people living in different regions.” He recommended reforming outdated local government structures and smarter public investment, particularly in cities.

Big cities often experience the starkest income inequalities, according to OECD. The report recommends better management of urban areas to reduce inequalities and improve prosperity, noting more compact cities have lower pollution, fewer carbon dioxide (CO2) emissions and other environmental benefits. The report emphasizes that improved urban management can reduce air pollution, increase access to public services, improve transport and make cities safer.

The report further recommends coordinating policy across levels of government, jurisdictions and sectors, explaining that the “appropriate scale for policy intervention depends on the challenge to be addressed.” It also notes that cities need varying carbon mitigation strategies to address their difference sources of carbon dioxide.

In locations where disparities have narrowed, this is the result of weak performance in wealthier regions, rather than growth in poor regions, according to the report. It also finds that over 40% of national increases in unemployment since 2008 are concentrated in one region, in ten OECD countries.

Regional inequality in household income is lowest in Austria and highest in Australia, according to ‘How’s Life in Your Region,’ which analyzes overall well-being in 362 regions in OECD countries. Less than 10% of European regions have 25% of their population at risk of falling into poverty compared to 40% of US regions, according to the report. [OECD Press Release] [Publication: OECD Regional Outlook 2014] [OECD Regional Outlook 2014: Policy Brief]